Business Survival

Planning for 2012

2011-12-14T21:39:00.000-08:00

As 2011 comes to an end, it is time to begin planning for 2012. Currently the economy has added about 1.5 MM jobs n 2011 and the manufacturing sector has been growing for over 24
months. US manufacturers are cautiously optimistic.

Some of you won’t be planning for 2012… but hoping for 2012. The reason why I say HOPING is because some organizations will NOT put systems in place to get improved results and will do
the same things they did in 2011 but HOPE for different results.

If you want improved sales year after year, you need to put a system in place like a sales
contact management system/customer relationship management (CRM) system.

These systems allow you to:

Track all of your Prospects in your Sales Pipeline
Track Every Time One of Your Sales People Contacts a
Prospect/Customer
Track all Follow Up Tasks so Nothing Falls Through the
Cracks

This allows your organization to:

Sell More
Shorten Your Sales Cycle
Increase Your Average Sale

= INCREASED REVENUES !!!!

From the diagram above, companies with a CRM system average $256,087 per employee while companies without a CRM system average $178,542 per employee. That is 43% MORE SALES PER EMPLOYEE. Also, companies with a CRM system average $5,831,710 in annual revenue compared to $2,221,061 for companies without one. That is over 260% MORE SALES.

But one of the major takeaways is that a CRM system can help you increase your sales consistently year after year by as much as 43% per employee, if you fully leverage it.
Although we have our own CRM product, xRP, that we offer a FREE 30 day trial for, the best CRM system for any company...IS THE CRM SYSTEM YOU ACTUALLY USE.

Thanks,
Ben Moore
Agent Technologies, Inc.

US Manufacturing & the Debt Ceiling

2011-07-29T02:58:00.000-07:00

On August 2, 2011 the United States is going to hit its debt ceiling of 14.3 Trillion dollars. However, there has been a good amount of political posturing in the Legislative Branch on a compromise of the spending cuts and revenue increases before the House of Representatives and Senate will pass an increase to the US debt limit. Without raising the US debt ceiling, the US would have to default on some of its obligations for the first time in history.

Treasury Secretary Timothy Geithner wrote: “A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment.”

The National Association of Manufacturers sent Congressional leaders a letter urging action to raise the federal debt limit. The letter stated, "With economic growth slowly picking up we cannot afford to jeopardize that growth with the massive spike in borrowing costs that would result if we defaulted on our obligations."

LORD Corporation, a US Manufacturer said, “America cannot afford to renege on its commitments, and LORD would not be in a position to add jobs if our country were to default on its loans. Assuming that there is a last-minute deal to raise the debt limit and avoid default, the terms of this deal will also have a direct impact on our ability to add jobs and remain competitive in the future.”

Larry Sloan, president of the Society of Chemical Manufacturers and Affiliates (SOCMA) stated “A less than stellar credit rating on our sovereign debt will trickle down to higher interest rates on everything from capital improvement loans to revolving credit." As a consequence, chemical companies and other industrial firms that depend on outside funding for capital improvements or major equipment purchases “could feel the brunt. Among other consequences, a US default or even a credit rating downgrade would put downward pressure on the US dollar. That might make US exports more competitive in foreign markets, Sloan noted, but it also would increase the cost of US imports, including for raw materials that many US chemical companies need. “The cost of raw material imports could far outpace any export boost resulting from a cheaper dollar, and profitability would suffer,” Sloan said.

Not raising the US debt ceiling would harm US Manufacturing, which has been leading the US Recovery out of the Great Recession.

Thanks,
Ben Moore
President
Agent Technologies, Inc.

CRM for Manufacturers (Part 2)

2011-06-16T05:29:00.000-07:00

Last month we defined Customer Relationship Management (CRM) as a company wide strategy for delivering HIGHER PROFITS to your organization by:

1) Increasing Sales - Finding, attracting, and winning new clients
2) Increasing Sales - Nurturing and retaining existing clients
3) Increasing Sales - Enticing former clients back into the fold
4) Lowering Costs - By reducing the costs of marketing and client service

The promise of Higher Profits and Increased Sales is nice, but can we quantify that increase in sales?

From the diagram above, companies with a CRM system average $256,087 per employee while companies without a CRM system average $178,542 per employee. That is 43% MORE SALES PER EMPLOYEE. Also, companies with a CRM system average $5,831,710 in annual revenue compared to $2,221,061 for companies without one. That is over 260% MORE SALES.

When evaluating a CRM System, below are a couple of items to consider:

1) Contact Management - Tracking and Managing Every Contact and Its Information
2) Lead Management - Tracking Leads and Contacts through the Sales Process
3) Forecasting - Forecasting Potential Sales
4) Task Management - Managing Follow Up Tasks and To Do Items
5) Reporting - Automatic Reporting of Customer, Order and Management Metrics
6) Alerts - Alert Users of Tasks, Activities, etc.
7) Campaign Management - Creating and Managing Leads and Prospects Through Campaigns
8) Quota Management - Managing Sales Team to Individual Quotas/Territories
9) System Integration - Integrating with Other Business Systems (Financial, Operational, etc.)
10) Hosted/On-Premise - Is Solution Hosted (Off-Site) or On-Premise

These are just some of the items covered in my CRM for Manufacturers Seminar. For a copy of the handouts, just reply to this email requesting a copy.

But one of the major takeaways is that a CRM system can help you increase your sales consistently year after year by as much as 43% per employee, if you fully leverage it.
Although we have our own CRM product, xRP, that we offer a FREE 30 day trial for, the best CRM system for any company...IS THE CRM SYSTEM YOU ACTUALLY USE.

Thanks,
Ben Moore
Agent Technologies, Inc.

CRM for Manufacturers

2011-05-18T06:08:00.000-07:00

CRM stands for Customer Relationship Management and is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments (Wikipedia Definition).

What does that mean? CRM means HIGHER PROFITS by:

1) Increasing Sales - Finding, attracting, and winning new clients
2) Increasing Sales - Nurturing and retaining existing clients
3) Increasing Sales - Enticing former clients back into the fold
4) Lowering Costs - By reducing the costs of marketing and client service

Why it is so important for manufacturing...because manufacturing in many cases has a complex sales process.

From the figure above, it shows the manufacturing sales process involving:

1) Understanding Customer Requirements
2) Developing a Solution
3) Incorporating Engineering
4) Developing a Manufacturing Process
5) Finishing with a Proposal as the Output

The proposal MAY or MAY NOT turn into an actual sale. This makes it critical to document all of the requirements, all learnings from interactions with the potential client, concerns in the engineering and manufacturing processes, any customer insight gathered over the months to years of the sales process and follow-up task reminders to give your organization the best chance of winning this project in a global environment.

Want to find our more about CRM for Manufacturers?Attend one of the FREE CRM for Manufacturers Seminars to learn:

1) Why manufacturing companies need CRM systems
2) How to evaluate CRM systems and learn what technology will be important for your company
3) How to fully leverage a CRM system in your organization

Date: 5/26/2011
Time: 9:00AM - 11:00AM
Location:
TechSolve
6705 Steger Drive
Cincinnati, OH 45237
Fee: Free
Register: Register

Date: 6/14/2011
Time: 8:30AM - 10:30AM
Location:
The Entreprenuers Center
714 East Monument Ave.
Dayton, OH 45402
Fee: Free
Register: Register

Thanks,
Ben Moore
President
Agent Technologies, Inc.

The Future of General Motors (GM)

2011-04-19T23:20:00.000-07:00

Before we talk about the future of General Motors, we need to talk about the past. GM lost over 103 billion over the previous five (5) years.

On Friday July 10, 2009 a new company GMGMQ.PK arose from the GM bankruptcy proceedings with:

- U.S. Treasury owning 60.8%
- The Canadian and Ontario governments owning 11.7%
- The Union Retirees Healthcare Trust (VEBA) owning 17.5%
- Current Debt Holders could get as much as 10%

Below is the comparison from the OLD GM to the NEW GM.

OLD GM NEW GM
Debt 172.81 billion 11 billion
Brands
Chevrolet, Cadillac, Chevrolet, Cadillac,
Buick, GMC, Pontiac, Buick and GMC
Saab, Saturn and Hummer

Employees 91,000 (end of 2008) 64,000

Dealerships 6,000 (end of 2008) 3,600 (end of 2010)

US Factories 47 34 (end of 2010)

Through the bankruptcy proceedings GM received about $50 billion in tax payer funds, but now GM had its first profitable quarter in a while last year and had an Initial Public Offering (IPO) of the new company at $33 per share in Nov 2010. Although the share price went up to $40/share, it has since dropped to under $30/share. The US Treasury is considering selling its 500 million shares at a loss because in order to break even the sell price needs to be $53/share.

On the car front, although the Chevrolet Volt, GM’s electric hybrid vehicle, will cost nearly $40,000/unit and only expected to sell 10,000 units this year GM plans to double car sales in China by 2015.

In 2010, GM sold 2.35 million vehicles in China. They plan to sell 5 million vehicles in China by 2015.

China’s auto market is now the world’s largest with 13.7 million vehicles being purchased in 2010 compared to the 10-11 million vehicles being sold in the US in 2010.

GM also plans to roll out 60 new and upgraded models in China in the next five years, almost half of them Chevrolets and Buicks, GM China President Kevin Wale said.

Although the US tax payers may not recoup the $50 billion provided to GM nor the tens of billions in tax exemptions for the next 20 years, the future of GM is very, very bright.

Thanks,
Ben Moore
Agent Technologies, Inc.

Made in America

2011-03-16T23:59:00.000-07:00

ABC News recently did a Made in America segment where they worked with a family to furnish three rooms (Kitchen, Bathroom and Living Room) exclusively with products that are Made in America. The findings were almost all items could be sourced from American companies at comparable prices to foreign competitors, except televisions; televisions were no longer manufactured in the US. Also, the findings were only high end Refrigerators and Stoves are still Made in America.

http://abcnews.go.com/WNT/video/world-news-made-america-challenge-groundbreaking-project-american-made-goods-12772486

Here are some of the facts:

In 1960, foreign goods made up just 8 percent of Americans' purchases. Today, nearly 60 percent of everything we buy is made overseas
2010 US Imports were 1.935 trillion while 2010 US Exports were 1.3 trillion. This equates to $695.04/month per American Adults (232 million American Adults). While goods and services exports total about $517/month per American Adult. (Made in the USA Certified made the claim if each American Adult reduced their spending on foreign made products by $180/month we could eliminate our trade deficit)
If every American spent an extra $3.33 on U.S.-made goods, it would create almost 10,000 new jobs in this country

Chart from Made in the USA Certified

These facts are spurring a new spirit of Economic Nationalism where Americans are seeing the current US trade deficit as unsustainable and the need to create more jobs in the US by purchasing more items Made in America and exporting these goods to the emerging middle classes all around the world.

Also, other trends positively impacting American Manufacturing are:

Increase in Cost of Foreign Workforces while American Workforce Cost are Flat
Companies Desire to be more responsive to customers (long lead times of manufacturing overseas)
Cash Management – overseas orders have to be paid for before they are shipped and it may be 30 days before the products arrive in the US
American Productivity – American Manufacturing has been able to produce more output with fewer workers due to automation and work processes.

For more on Reshoring – bringing Manufacturing Jobs back to the US: http://www.agenttech.com/newsletter/201008_Reshoring.html

For companies that are looking for ways to become even more productive, feel free to read my book – The Consumer’s Workshop: The Future of American Manufacturing or contact us to see if we can help.

Thanks,
Ben Moore
President
Agent Technologies, Inc.

US Manufacturing Output vs. Other Countries

2011-02-15T23:09:00.000-08:00

US Manufacturing is almost back to 2006 output levels and close to 2006 labor costs while countries like Canada, Italy, Germany, Japan and the UK’s output levels have declined and labor costs have increased.

Canada, Italy, Japan and Italy’s manufacturing output is down 10-15% from 2006, while Germany’s manufacturing output is down around 5 %. Also, labor costs have increased around 10% for these countries since 2006.

This contrasts with the US Manufacturing output being around the same level of 2006 and decreased labor costs versus 2006 labor costs. Some of this productivity increase has come due to investment in automation while other countries, like Germany, have invested less in automation and in some cases has used manufacturing as a jobs program allowing increased labor costs per unit of manufacturing output.

Chart from The Street Light by Kash Mansori

The Chart above shows the top 10 countries listed by value of exports ($) with their Gross Domestic Product and Exports/GDP %. The top 10 countries average about a 28% exports/GDP percentage, while the US has only a 8.7% exports/GDP ratio. US companies have a lot of room to grow as they increase their exports to the world instead of the US consumer driving the world economy....hence a very bright outlook for US Manufacturers.

Thanks,
Ben Moore
Agent Technologies, Inc.

US Manufacturing Outlook for 2011

2011-01-18T20:51:00.000-08:00

- Goldman Sachs forecasts real GDP to rise to 3.4% in 2011 and 3.8% in 2012 (up from 2.7% and 3.6%) in part due to extended jobless benefits and continued payroll tax cut extensions.

- Business Productivity has declined to 2.5% in the 3rd quarter. As productivity slows, companies have no choice but to hire employees to increase productivity.

- Real consumer spending increased to 2.9% in 4th quarter after growing 2.8% in the 3rd quarter. Consumer spending accounts for 70% of US economy.

- Purchasing Manager’s Index (PMI) is an accepted measure of US manufacturing growth with a number over 50 means manufacturing is growing. The PMI index has been above 50 (growing) for 17 consecutive months.

- Of the 18 manufacturing industries, 11 are reporting growth in December, in the following order: Apparel, Leather & Allied Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Textile Mills; Plastics & Rubber Products; Transportation Equipment; Electrical Equipment, Appliances & Components; and Chemical Products.

Other Items:

- Through all of 2010, the nation added 1.1 million jobs, or an average of 94,000 jobs a month

- Nonfarm payroll employment increased by 103,000 in December 2010. Manufacturing employment decreased by 10,000. Unemployment rate decreased to 9.4% nationally.

- South Korean trade deal should increase US exports to South Korea from 68 billion/year to 79 billion/year. This deal is believed to be a framework for additional export deals bringing together US manufacturers, unions and lawmakers.

These items show that US Manufacturing is going to come roaring back in 2011 driving the US economy. So is your manufacturing operation ready to handle the growth? Do you have scale up plans? Do you have the right people that can help your operation grow? Let me know what your outlook is for 2011.

Thanks,
Ben Moore
Agent Technologies, Inc.

Going Green is Green ($)

2010-12-14T19:24:00.000-08:00

Historically the measure of productive manufacturing has been categorized into the five M’s, man, machine, material, methods and measurements; made possible by the sixth M – money. Continuous improvement methods such as Lean manufacturing and Six Sigma have yielded significant gains in bottom line profits. So when a manufacturer asks me why they should go Green, I kindly reply by asking, “why not?”

The process of manufacturing utilizes social, environmental and economic resources. The best manufacturer considers the productivity of each raw material used. Sustainability or “Going Green” has become more than the “topic du jour” as our economy and environment shrinks and changes. The next level of manufacturing excellence considers its impact from a perspective of sustainability. A former CEO of mine once said, “Green is Green ($)”.

The formal definition of sustainability is “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” If your business is going to exist tomorrow, you must consider your consumption of needs today. How much material or how many resources does it really take to produce 1 unit of good product?

So why won’t a business Go Green or implement Sustainability?

- Lack of right information about the benefits
- Struggle to define business case relative to their industry
- Action is taken…but execution is flawed

What is the Business Case?

Growth
- Preferred position, enhanced market entry
- Sustainable suppliers add continuous value
- Improved customer loyalty; less churn

Lower Costs
- Reduce, reuse and recycle, maximizes 5M productivity
- Resource efficiency – (i.e., material, water, energy & man)
- Greater operational efficiencies

Increased Profits
- Customers pay a premium
- Cash and non-cash (Sustainable ROI)
- Lower costs and taxes

What can you do now?

Assess where you are today
- Clarifies your business case
- Establishes a knowledge baseline
- Initiates competitive advantage

Create a sustainability plan
- Identifies critical areas
- Aligns operations with sustainable goals
- Communicates commitment

Create Sustainable ROI measures
- Economics: Sustainable ROI
- Social: Improved reliability
- Environmental: Waste avoided

As an organization considers the transition to sustainability, knowledge, skills and ability are essential for proper project selection, measures and flawless execution. Successful sustainability implementation is top-down driven with significant recognition to stakeholders, consumers and regulatory agencies driving the evolution. For a more in depth discussion or questions contact The InnoTrans Group at info@parkerenterprisesllc.com.

Donnell Cathey, MBA, CSSBB
The InnoTrans Group
513-266-4847
donnell.cathey@parkerenterprisesllc.com

The InnoTrans Group, a division of Parker Enterprises LLC, is an innovative business improvement firm that institutes change and delivers real business results. Proven leadership, measurable results, innovative solutions, and wealth of experience have assisted clients across a diversity of industries. We focus on developing resources and strategy and improving processes by putting proven functional tools to work. We work hand and hand to remove barriers to success, while creating an environment of right to left thinking, continuous improvement and sustainability. www.parkerenterprisesllc.com

Planning for Income Taxes in an Uncertain Time

2010-11-16T21:37:00.000-08:00

The midterm elections have changed the Congressional landscape, with Republicans winning control of the House of Representatives. However, it’s still too early to know exactly how this will affect open tax issues for 2010 and 2011. When the “lame-duck” Congress returns this month, it must decide how to proceed on a large number of issues. This means year-end tax planning, which always involves some educated guesswork, is a bigger challenge this year than in past years.

Here are some pending issues Congress needs to vote on:
• Extending tax provisions that expired at end of 2009
• Patching the AMT system
• Extending the Bush tax cuts
• Estate taxes

CURRENT TAX TOPICS & ISSUES
Even as the year 2010 comes to an end, many tax issues effecting 2011 remain undecided and hotly debated. Whether or not the “Bush Tax Cuts” will be extended will have a widespread and material effect on nearly all taxpayers. At this point it is merely speculation as to whether all, some, or none of the “Bush Tax Cuts” will be extended. However, common belief is that at the very least, some of them will be extended. The issue continues to be debated however when it comes to those taxpayers that fall into the highest two tax brackets. Our best advice is to keep your eyes and ears open for any final decisions and to call a CPA to discuss how these changes will impact you, or your business, directly.

The other big item in a state of flux is the estate tax. If Congress does not act, the estate tax will revert to its 2001 level, a 55% tax rate for individual estates larger than $1 million. If in need of estate planning, please consult with your accountant and attorney.

In spite of this state of limbo, the tax changes noted below will definitely be in place. These changes should prove beneficial from a tax savings standpoint as long as you are well-informed of them and able to plan accordingly.

DEPRECIATION
For all of 2010, and 2011, Code Section 179 has expanded the ability to completely expense the acquisition of new property in the current year (rather than depreciating it over time). Specifically, the new rules allow for a taxpayer to expense up to $500,000 of new property placed in service; with a dollar for dollar reduction to the $500,000 limit for total property placed in service over $2,000,000. This property must be new and does not include real property (buildings, land, etc.). However, an allowance has been made for some qualified leasehold improvements. These improvements must be to a property that you are the sole lessee of and the property must have been in service for at least 3 years prior to the improvement. Please discuss your particular situation with a CPA to determine your eligibility.

H.I.R.E. ACT
The Hiring Incentives to Restore Employment (HIRE) Act of 2010 carried two valuable incentives for employers who expanded their workforce. First, it created an exemption on the employers 6.2% share of Social Security employment taxes on wages paid between 3/19/2010 through 12/31/2010 to a newly hired qualified individual. Secondly, it created an up-to-$1,000 tax credit for keeping such qualified individuals on the payroll for at least one year. A qualified individual is one who:
• Begins employment after February 3, 2010 and before January 1, 2011
• Was not employed for more than 40 hours during the 60 day period prior to employment with your company
• Does not replace another employee (unless that employee left voluntarily or for cause)
• Is not related to the qualified employer

If you have employees that met these tests, or would like further clarification please contact a CPA, or your payroll company, in order to maximize any credits you may be entitled to.

HEALTH INSURANCE TAX CREDIT
For tax years beginning after December 31, 2009 the Patient Protection and Affordable Care Act (PPACA) has created a tax credit for an eligible small employer (ESE) for nonelective contributions to purchase health insurance for its employees. The credit is up to a maximum of 35% of health insurance purchased for tax years 2010-2013 and up to 50% for 2014. An ESE is an employer with no more than 25 full time equivalent employees (i.e. 50 half time employees, 20 full time and 10 half time, etc.) whose annual full-time equivalent wages average no more than $50,000. While the credit is available to all ESEs, the full credit is only available for ESEs with 10 or fewer employees and average full time equivalent wages of less than $25,000. Talk with your CPA in order to determine the amount of credit your ESE is eligible to receive.

These are just a few of the many things to consider as you develop a tax saving plan for now and the future. If you would like to explore some alternative tax planning strategies in more depth, please contact FRANZ CPAs, Inc.

Anthony J. Borgerding, CPA, MBA
FRANZ CPAs, Inc.
513-489-4848
borgerding@fuse.net

FRANZ CPAs is a full service public accounting firm, large enough to offer a full array of accounting, taxation, payroll, and consulting services, but small enough to know you on a personal level. FRANZ CPAs is dedicated to serving private businesses and individuals in the greater Cincinnati area. For additional information, please visit our website at www.franzcpas.com.

Product Systemization: One Method to Help Save American Manufacturing

2010-10-22T03:21:00.000-07:00

Systemization is the process of defining what range of products will be made and what range of production processes will be employed. Without product systemization, manufacturers will and have seen increases in operating costs especially for their made-to-order products.

Companies experience systemization issues in:

1) Engineering: Slow delivery in design of deliverables
(Many engineering hours in engineering different subcomponents)
2) Engineering: Slow cycle time and inefficiency when engineering custom orders
3) Sales and Marketing: Delays in turnaround on requests for proposals
4) Manufacturing: Delays and inaccuracy in creating designs and drawings
5) Corporate: Increased Operating Costs
6) Corporate: Decreased Profitability

If your company is experiencing any of these issues, you might NEED to consider a systemization effort in order to achieve:

• Operating cost reduction
• Faster product delivery
• Increased profitability.

As your organization considers product systemization, use this checklist below to help strategize and plan:

1. Identify all components. Identify the part/part family or products/product family that currently exist. Identify how they are used and the feature and/or benefit of using the component.
2. Justify the existence of all components.
3. Identify all redundant components.
4. Eliminate all redundant components. Rigorously drop all components that are duplicated.
5. Justify the existence of all components using only one product family.
6. Determine assemblies and sub-assemblies from justified parts.
7. Eliminate or at least create a plan to eliminate assemblies/sub-assemblies with redundant functionality (if possible).
8. Design engineering strategies.
9. Determine price breaks from the product’s supplier. For example, identify quantity discounts if a large quantity of one part is ordered, versus many smaller orders for many separate components.

If you need help, feel free to read The Consumer’s Workshop: The Future of American Manufacturing or contact me to see if we can help you.

Thanks,
Ben Moore
Agent Technologies, Inc.

What is SMART Manufacturing?

2010-09-15T14:01:00.000-07:00

SMART Manufacturing is "An integrated, knowledge-enabled, model- rich enterprise in which all operating actions are determined and executed proactively applying the best possible information and a wide range of performance metrics."

Smart Manufacturing extends from requirements, product and process design to execution, delivery and life-cycle support.

10 Attributes of Smart Process Manufacturing

1. Intelligent actions and responses
2. Operating assets are integrated and self-aware
3. Adapts to abnormal situations
4. Data when, where, and in the form needed
5. Proactive failure prevention
6. Rapid response for proactive control
7. Environmentally sustainable
8. People: knowledgeable, empowered and trained
9. Recognize the limits of automation
10. Drive strategic enterprise performance

Manufacturing IS about data…NOT about machines. The data that is being continuously generated by smart machines and transmitters must be translated into actionable information.

1) Enable assets to autonomously recognize and respond to situations
2) Develop techniques and standards for integration across the supply chain
3) Integrate enterprise and plant level planning
4) Provide comprehensive knowledge capture and knowledge management solutions

Components of SMART Manufacturing:
1) Distributed intelligent manufacturing
- Decisions and actions made at lower level of plant granularity
- Coordinated/aggregated smart units
- Centralized hierarchical management to coordinated distributed management
2) Explicit management of risk and uncertainty
- Robustness to risk and changing situations
- Greater flexibility and responsiveness to overall goals
3) Distributed business and operating intelligence to units through integrated models

I have been in manufacturing for a number of years and have been involved with a major smart manufacturing project using autonomous agent software on a Department of Defense Manufacturing Technology (ManTech) project back in the 1990s; we built a platform where autonomous agents (software) represented each machine, tooling, fixture, operator, unit operation and part broker in the manufacturing operation and would communicate and self-organize to determine the optimal factory schedule. We were all excited when DeviceNet hit the market because these were smart sensors that were somewhat self aware and thought the "smart manufacturing" vision was only a few years off. Fast forward 15 years later and the vision has not made much progress. I just hope it is not another 15 years before smart manufacturing is more of the norm than visionary. Let me know what you think.

Thanks,
Ben Moore
Agent Technologies, Inc.

References:
1) SPM EVO July 2009 (Smart Process Manufacturing Engineering Virtual Organization)
http://www.oit.ucla.edu/NSF-EVO-2008/
2) “The Evolution of Smart Manufacturing” by Walt Boyes Editor in Chief Control and ControlGlobal.com

Reshoring - Bringing Jobs Back to America

2010-08-15T18:03:00.000-07:00

We all have heard of Off-Shoring where companies move jobs out of the United States to save money, however, there is a nice trend of companies Re-shoring, where they bring jobs back to the United States that were once moved out of the United States. Why is this trend gaining steam…SAVING MONEY !!! Some companies have found that it is CHEAPER to manufacture within the United States. Small companies to companies like Boeing, Catepillar, General Electric, General Motors and NCR are looking to move some production back to the US.

Companies have been lured by the low piece cost they could obtain for moving production to low cost countries like China. However, some have found:

1) The Cost of Quality – many companies have found poor quality from overseas suppliers forcing them to reject full containers or more than 50% of a shipment routinely. This creates disruptions in your supply chain and has forced some companies to increase their inventory levels. Also, some have hired inspectors just to do a quality inspection on parts from overseas suppliers. So think, what is the cost of quality, increased inventory costs, supply chain disruptions, additional inspectors will increase the per piece price you were quoted.

2) Long Delivery Cycles – how responsive to the customer can your organization be if it takes months longer to get items from overseas suppliers than if an item is made within the United States. Some companies have had to forecast months out what items will sell and are not able to respond to actual customer demand quickly.

3) Stolen Intellectual Property – some companies have experienced counterfeit products in the market produced by the same overseas companies they have producing their products because intellectual property laws are harder to enforce in places like China.

4) Workforce/Supply Chain Outages – some companies have found a lack of basic mechanical/electrical skillsets in the employment pool to develop into equipment operators and maintenance personnel and a lack of reliable suppliers for their overseas plants. Hence, these companies are not able to run their equipment at the high efficiencies they projected creating higher prices per part than in other more developed countries.

Other Items Helping Re-shoring:

1) Chinese wages and shipping costs are continually increasing, while American wages have remained relatively flat.

2) Desire to be more responsive to customers by manufacturing where the US companies’ engineering base is for rapid innovation cycles. Also, when there are customer changes to an order, overseas production came create communication and delivery issues.

3) American Productivity – American manufacturing has become more and more automated in the last decade removing much of the benefit of manufacturing in low wage countries. My company has even helped a variety of manufacturers become more productive using our engineering pyramid methodology where we train them standardization, systemization, maximizing reuse and moving to more configuration engineering from starting from a clean sheet of paper with each design. All in an effort to become more productive and profitable.

4) Cash Management – typically orders have to be paid for before they are shipped from China and these orders may not arrive in the US for another 30 days. This practice ties up precious cash for longer periods of time that could be better used in the business.

Not all manufacturing is a candidate for re-shoring. Mass produced, labor intensive items will not be coming back. Look at the textile and apparel industries.

Also be sure to check out the National Tooling & Machining Conference on Reshoring: Bringing Work Back to U.S.A - https://www.ntma.org/eweb/ProfilePage.aspx?WebCode=CSCEventInfoSC&evt_key=0bd0ea71-bbf9-4e3f-8d23-f3ec1d9e8fcc

Ben Moore
Agent Technologies, Inc.

Lessons from the Book: Saving American Manufacturing by Michael P. Collins

2010-07-14T06:57:00.000-07:00

Last month I had the opportunity to sit down and talk with the author of “Saving American Manufacturing”, Michael P. Collins. We talked about our views of American Manufacturing and it’s future and I want to share with you some of the lessons form his book.

Current Situation of American Manufacturing:

Manufacturing as a Percent of Gross Domestic Product (GDP)

China 34%
Germany 23%
US 11% (29% in 1950)

Michael believes there is a critical mass of manufacturing we need in the US before our national growth falls from 3% per year down to 1-2 % per year. This will greatly impact the way of life in the US.

Lessons from the Book - Saving American Manufacturing (Ways to Grow American Manufacturing):

1) Stop the Bleeding – Find out why you are losing orders, find out how your products/services compares to your competitors and put plans in place to correct any product outages and TALK TO YOUR CUSTOMERS

2) Find New Markets – classify you most profitable customers by NAICS code and market to other companies under that NAICS code. Begin looking internationally for markets for your products and not just markets within the US. Also, determine the best combination of sales/distribution channels to reach these niche markets.

3) Offer New Products/Services – from marketing research that includes customer/prospect conversations, create new products to meet a niche or add services to your product offering

4) Offer Customized Products & Short Production Runs (this is one of my favorite methods for American Manufacturers because in order to provide a customized product you have to build a relationship with that customer that is hard to duplicate by another company and your product margins typically are much higher).

5) Become a Prospector Organization – Most manufacturers have a Defender Organization that works well for stable, reliable markets with a functional organizational structures with centralized decision making. Prospector Organizations works well in a changing environment. Prospector Organizations have decentralized control, service multiple markets and constantly finding and capitalize on new product and market opportunities.

I recommend any one in manufacturing to purchase the book on Amazon.com.

http://www.amazon.com/gp/product/0976367513/ref=s9_qpp_gw_p14_ir04?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=0JKPSDFTHK6H5WN8GJ44&pf_rd_t=101&pf_rd_p=470938631&pf_rd_i=507846

Thanks,
Ben Moore
Agent Technologies, Inc.

The Status of American Manufacturing

2010-06-13T10:47:00.000-07:00

Manufacturing has been a leader in the economic recovery as demand from abroad strengthened and manufacturers picked up production and spending to meet demand after a record drawdown in inventories in 2009.

Current Status of American Manufacturing

- Factories added 101,000 workers to payrolls in the first four months of the year

- The Institute of Supply Management’s (ISM) employment gauge climbed to 59.8, the highest level since May 2004.

- ISM’s measure of exports increased to 62, the highest since December 1988.

- Nondefense new orders for capital goods in April increased $5.5 billion or 9.2 percent to $66.1 billion.

Trends in American Manufacturing

- Manufacturing's share of the US economy has dropped to 12 % of GDP from the high of 28.3 percent in 1953, after WW II.

- Manufacturing employment has fallen to 9.25% of US Employment from 26.5% in 1969.

- From 2000 to 2008, the U.S. share of global output fell from 31 % to 27 %.

- Commercial shipbuilding and consumer electronics industries have largely disappeared since the 1980s, while U.S. steelmakers now account for only 7 % of global output (compared to 38 % for Chinese steelmakers).

- The migration of manufacturing overseas is not confined to traditional metal-bending activities: the pharmaceutical industry is now incapable of manufacturing antibiotics such as penicillin without supplies from China.

Issues Facing the Future of American Manufacturing

- The European debt crisis creates a stronger dollar and the potential for slower demand from Europe potentially slowing U.S. exports.

- America’s annual trade deficit has increased from $380 billion at the beginning of the decade to well over $700 billion today.

- China’s growth rate averaged about 10 percent annually throughout the decade partially due to Chinese currency manipulation keeping cost of their goods artificially low.

Ben Moore
Agent Technologies, Inc.

Happy Days are Here Again….Kind Of?

2010-05-11T13:58:00.000-07:00

In April 2010, nonfarm payroll employment increased by 290,000. Since December 2009, nonfarm payroll employment has increased by 573,000, with 483,000 jobs added in the private sector. The majority of job growth occurred during the last 2 months. Manufacturing added 44,000 of these jobs gains in April. Since December, factory employment has risen by 101,000. Over the month, gains occurred in several durable goods industries, including fabricated metals (9,000) and machinery (7,000). Employment also grew in nondurable goods manufacturing (14,000). I hope you are in one of these sectors.

Chart of the number of job losses from January 2008 to March 2010.

Finally after about two (2) years of job losses, manufacturing started growing in October 2009, driven by re-orders from low inventory levels, and finally has began adding jobs in the last couple of months. Manufacturing has always been a lead economic indicator seeing the downturn before the rest of the economy in 2008 and starting to see the upturn beginning in October 2009. The belief is that job additions will continue. U.S. manufacturing companies have improved their productivity over the past two (2) years and have improved earnings, which should translate into a willingness to invest in manufacturing infrastructure for future growth and improved profitability by making investments in plant and equipment.

Let me know what you think…Do you believe American Manufacturing is on the Comeback?

Ben Moore
Agent Technologies, Inc.

Last Minute Tax Tips

2010-04-14T00:44:00.000-07:00

Business:

1) Depreciation: The maximum first-year depreciation deduction has been increased by $8,000 for cars placed in service before 2010. The Section 179 deduction is still at $250,000 for 2009. The first-year bonus depreciation break of $50,000 is still in place for 2009.

2) Cobra Credit: If you provided a COBRA subsidy to laid off employees, you can claim a credit for the provided COBRA subsidy.

3) Home Builder Tax Credit: If you build homes, you may claim a credit of up to $2,000 for each qualified energy-efficient home constructed and acquired from you for use as a residence.

Personal:

1) The first $2,400 of federal unemployment compensation benefits you receive are excluded from gross income.

2) Making Work Pay tax credit: A maximum of $400 for working individuals and $800 for working married couples, is reduced by the amount of any Economic Recovery Payment ($250 per eligible recipient of Social Security, Supplemental Security Income, Railroad Retirement or Veteran's benefits) or Special Credit for Certain Government Retirees ($250 per eligible federal or state retiree) that you receive.

3) You can claim a deduction for “qualified tuition and related expenses” relating to the enrollment or attendance of you, your spouse or your dependent at an eligible college or university. While it is subject to phase-outs at higher income levels, the deduction can be as large as $4,000.

4) Home Buyer Tax Credits Up-to-$8,000 credit for first time buyers and up to 6,500 for other home owners. It is subject to phase-outs at certain income levels and the home you buy has to be your principal residence.

5) You may be able to deduct state and local sales and excise taxes if you buy a car, motorhome, motorbike or light truck.

6) Capital Gains: If you are in the 10% or 15% tax bracket, the current tax rate for long-term capital gains is 0%.

7) Make energy efficient improvements to their home? For the 2009 and 2010 tax season, the tax credit has been increased to 30% of the cost of the improvement up to $1,500.

8) Tax-free direct transfer of up to $100,000 from your IRA to a charitable organization. You must be age 70½ or older to do this.

Of course, check with your financial adviser to see if these tax tips apply to you or your business.

Thanks,
Ben Moore
Agent Technologies, Inc.

The Engineering Pyramid: Increasing the Speed of Innovation

2010-03-14T22:54:00.000-07:00

In today’s reality, manufacturers all over the world have to increase their speed of innovation in order to compete. The Engineering Pyramid was a methodology we helped implement in P&G Babycare to move from 600 support engineers to less than 125 support engineers. HOW…moving your engineering workforce to more configuration engineering instead of designing from scratch; this involves moving your engineering organization from working primarily with fabricated and commercial parts to complete assemblies.

The Engineering Pyramid Methodology

1. Take advantage of the parts and assemblies that already have most of the common components and use them as the basis of the next piece of equipment
2. Parts and assemblies must be designed to support reuse in many applications
3. Engineers need to pay attention on how assemblies are structured and the interfaces to these assemblies to get the assemblies to be reused
4. Develop the system from the top-down

Implementing The Engineering Pyramid:

A. Develop the system from a top-down approach.

1. Functionally describe what you are building on the top level before executing the design.
2. Begin with a top-down approach by defining the highest level assembly before defining lower level assemblies.
3. Work your way down to the detail level making sure all constraints at the upper level are being followed.
4. Design the interfaces in a common format between functions

B. Use a documentation system that flows from top down. (In most engineering systems documentation flows from the bottom up.)

1. Connect all information to the entity/part.
2. Document in a way that if the higher assembly is reused, all the information travels with it.
3. Establish relationships from the assemblies that flow from the top down.
4. Allow users to drill down into the level of detail they need.
5. Create views of the information for different users
Example: A person that operates the equipment needs a different level of information than a person that maintains the equipment.

C. Leverage the Engineering Pyramid

1. Train on: Design for re-use, Leveraging component interfaces and Design using the top-down approach
2. Reward people for re-application of existing components.
3. Reap Profitable Innovation

Those who adapt this methodology will be the low cost, fast producer for their industry. If you need help in speeding innovation at your company, check out my book: The Consumer’s Workshop: The Future of American Manufacturing ( http://www.amazon.com/Consumers-Workshop-Future-American-Manufacturing/dp/1419654454/sr=8-1/qid=1171058776/ref=sr_1_1/105-7417071-6070047?ie=UTF8&s=books ) or contact me.

Ben Moore
Agent Technologies, Inc.

Increase Sales 43%

2010-02-14T00:29:00.000-08:00

Each year we all look at how can we increase sales in our companies and increasing sales by 43% is typically not an easy task. For some companies, the only way to increase sales by 43% is to start selling a different product or service. However, for all companies, companies that have a sales contact management/ customer relationship management (CRM) system have 43% MORE SALES PER EMPLOYEE. Sales Contact Management/CRM systems allows companies to track all sales touch points, tasks and activities to increase sales, decrease sales cycles and maximize each sales opportunity.

Companies with a sales contact management system average $256,087 per employee while companies without a sales contact management average $178,542 per employee. That is 43% MORE SALES PER EMPLOYEE. Also, companies with a sales contact management/CRM system average $5,831,710 in annual revenue compared to $2,221,061 for companies without one. That is over 260% MORE SALES.

Below is a comparison of some sales contact management/CRM systems.

                        
                             Salesforce.com ACT Goldmine SugarCRM xRP 
Manage Contacts, 
Sales Activities 
and Tasks                          X         X      X         X    X

Available over Internet            X                          X    X

Sales Forecasting Reporting        X         X      X         X    X

Marketing Automation 
(automate emails, faxes, etc.)               X      X              X 

Inventory, Production, 
eCommerce Modules                                                  X

Salesforce.com - Initial: $0 $9/User/Month

ACT - Initial: $300-$900

Goldmine - Initial: $300-$800

SugarCRM - $7/User/Month for up to 5 users $9/User/Month above 5

xRP - Initial: $0 $9/User/Month

The purpose of this diagram above is NOT to tell you that xRP – Our Online CRM/ERP System is the best. Any sales contact management/CRM system can help you increase your sales by 43% per employee…but only if you use it.

Happy Selling,
Ben Moore
Agent Technologies, Inc.

Starting 2010 Right !

2010-01-13T10:44:00.001-08:00

For those of us that have made it out of 2009, now it is the time to start 2010 out right. This means re-evaluating our business objectives and goals for 2010. For some of us, that may be rebuilding or undoing some of the damage that 2009 did to our businesses.

In starting 2010 out right, we all need to ask ourselves:

1) What are our revenue goals for the year?

2) What are the assumptions that have gone into our revenue projections?

3) How can we defend against potential threats to our revenue projections?

4) How/If you will use social networking in 2010 – don’t worry even many experts have not found ways to monetize social networking however it does allow us to communicate and collaborate with current and potential customers.

5) How will you protect your cash in 2010….as someone told me…Cash is not just King….Cash is the Emperor. If the cash is not available…almost nothing happens in an organization.

6) What will you need to do each day to achieve your business goals?

2010 also brings a variety of positives.

- Highly Skilled Available Workforce – due to the economic downturn and mass layoffs and high unemployment, there are a high number of highly skilled individuals that have been in the market for a while and would consider joining your team at a discount

- Increase in Temporary Workers in 4Q 2009 will lead to full-time hires sometime in 2010 as the economy continues to recover

- Increase in Consumer and Business Confidence – an increase in confidence comes first before an increase in purchasing

- Pent Up Demand in the MarketPlace – consumers and businesses have put so many projects and purchases on hold due to the economy, this pent up demand will break through and consumers and businesses will start purchasing at much higher rates.

So now that we have made it to 2010…and that was no small accomplishment in light of 2009, it is time to start growing again and BE A PART OF THE ECONOMIC RECOVERY.

Happy 2010,
Ben Moore
Agent Technologies, Inc.

The End of 2009: Good Riddance

2009-12-13T11:59:00.000-08:00

For most of my fellow business owners, the title says it all…The End of 2009: Good Riddance. Good Riddance because the 2009 environment was full of business closures, job losses and customer’s holding onto their dollars and postponing and cancelling many projects. Here are some of the numbers:

_____________________2009________ ___Since Dec 2007
___________________________________(Start of Recession)
Total Job Losses_______ ~3.4 MM_____________7.9 MM
Manufacturing Job Losses_~1.1 MM_____________2.1 MM

__________________________End Q3 2008_________End Q3 2009
Unemployment Rate______________6.8%______________10.0%
Real Domestic Product Growth______-2.7%_______________2.8%
Total Exports_________________152 billion___________132 billion
Total Imports________________212.1 billion__________168.4 billion

We have seen unprecedented assistance to banks and financial markets and a reorganization of two major American car manufacturers and the impact on the automotive supplier industry. Also, we had to adjust to a potential new normal going forward.

But on the flip side, for those of us who survived 2009, 2009 forced us to become better businesses.

We have a business model that should work into the future.
We have trimmed more than just the fat in our organizations, we are lean.
We have spent time working and understanding our best clients to keep us going.
As the economy starts growing, we will be in a better position to make even more profit.

So at the end of this year, let’s all wish 2009 a good riddance and look to 2010 for growth and profits…but let us never forget the lessons we learned in 2009 going forward. Let me know some of your lessons from 2009.

Ben Moore

Agent Technologies, Inc.

Year End Tax Planning Tips

2009-11-08T14:05:00.000-08:00

As the year comes to a close, it’s time to start thinking about year-end tax planning for your business and your family. There are a lot changes on the horizon that you need to be aware of to be sure that you are in full compliance with tax laws and that you are maximizing your potential for tax benefits and savings.

Here are some things to consider:
· Tax Rate Increases
· Net Operating Loss Utilization
· Estate Tax Issues and Planning
· Health Care Reform
· Energy Tax Credits
· Accelerated Depreciation
· Roth IRA Conversions
· State Tax Law Updates

TAX RATE INCREASES: TIMING IS KEY
As you may be aware, the rates for ordinary income as well as the preferential rates for long-term capital gains and qualified dividends are likely to rise.
· Have you fully considered the timing of your business and personal income and deductions?
· Have you fully explored all tax planning tools to minimize your tax exposure & liability?

NET OPERATING LOSS UTILIZATION: MINIMINZING YOUR TAX LIABILITY
Due to the struggling economy, many businesses have suffered losses in the past couple of years.
· A loss year presents an opportunity to maximize the benefits of the Net Operating Loss (NOL).
· Bad debt deductions and cancellation of debt income could have a big impact on your tax liability.

REVISIT YOUR ESTATE PLAN
Estate tax is another issue that has been on many people’s minds as of late due to the change in administration and the uncertainty surrounding the sunset provision that is still set to restore the tax to its higher original rates in 2011 after a complete phase out of the tax in 2010.
· While the tax is scheduled to go away in 2010, it is likely that new legislation will be passed
· Will the sunset provision be moved up to 2010?
· Will a patch be created to restore the gift tax using current rates and exemptions in 2010?
The current debate is a good excuse to take the time to reexamine your estate plan and possibly seek consulting and planning services to assist you.

HEALTH CARE REFORM BRINGS BIG CHANGES
Also on the horizon is extensive health care reform, the details of which are still uncertain.
· It is expected that a “Play or Pay” approach will be taken, in which all employers would be required to offer coverage to all of their employees that meets certain minimum standards & requirements.
· You should begin planning for these changes as soon as possible to ensure your business doesn’t fall behind and fail to meet the new compliance measures when they arrive.

ENERGY TAX CREDITS
Several things are driving this market faster and in new directions:
· Cost – Opportunity to save money
· Environmental awareness & concerns
· Uncertainty regarding supply of nonrenewables, federal carbon policy, & effect of green house gases
Are you aware of the opportunities for both businesses and individuals to qualify for the credits available?

ACCELERATED DEPRECIATION
Have you fully considered all accelerated depreciation options to minimize your tax liability?
· Section 179 expensing of newly acquired assets
· Bonus Depreciation is still available on certain assets through the end of 2009

ROTH IRA CONVERSIONS
Starting in 2010, it will be possible to convert a Traditional IRA to a Roth IRA without being subject to an Adjusted Gross Income limitation. Have you considered the potential benefits of making this transaction?
· Current & future tax rates & tax brackets should be considered when evaluating this decision
· Your projected time frame before needing assets is key
· Ordinary income must be recognized for the amount converted; how will you fund the tax payment?

STATE TAX LAW UPDATES
Are you aware of the state legislative changes and court case decisions that are relevant to your business and personal tax planning?
· Have you considered your possible nexus and tax exposure for any expansions of your business into new locations or contracts and sales to out-of-state consumers?
· Are you fully aware of Ohio and other states’ audit division activity and the most common audit adjustments?
· These factors can help you plan for and minimize your state & local tax liability

These are just a few of the many things to consider as you assess your individual and business tax planning for 2010 and beyond. If you would like to know more or have any questions, please contact me.

Dan Gerwe
Plante & Moran, PLLC
Direct: 513-744-4741
Dan.gerwe@plantemoran.com

Plante & Moran is the nation’s 12th largest certified public accounting and business advisory firm, providing clients with financial, human capital, operations improvement, strategic planning, technology selection and implementation, and family wealth management services. Plante & Moran has a staff of more than 1,500 professionals in 20 offices throughout Michigan, Ohio, Illinois, Monterrey, Mexico and Shanghai, China. Plante & Moran has been recognized by a number of organizations, including FORTUNE magazine, as one of the country’s best places to work.

View Past Issues at: http://www.agenttech.com/archive.asp

The Future of American Manufacturing

2009-10-12T05:28:00.000-07:00

Manufacturing has lost over 2.1 million jobs since the recession began. Many of these jobs will not be returning...especially labor intensive manufacturing. (Look at the textile industry.) These types of jobs will go to where the labor cost is the lowest….and that’s not in America. So what is Future of American Manufacturing?

If you were not providing any unique value…sorry to tell you…you might not be able to stay around and/or be profitable.

Quality has always been a major differentiator in manufacturing. Made in America is a mark of quality all around the world. If you are building a new chemical plant, do you want to buy valves and pumps made in China? The answer is no. Look at the recent drywall from China incident making people sick in the US. This example shows a possible impact of low quality and low cost items. But having great quality is becoming an EXPECTATION to doing business.

Great Customer Service? Yes great customer service can allow you to maintain your margins, but competitors can invest in customer service as well and it is becoming an EXPECTATION from customers as well.

What is left? Relationships…. understanding your customer and potentially being able to produce made-to-order products profitably. Product Configuration and Mass customization have been concepts that have been around for a while that more and more American Manufacturers are embracing. Product Configuration involves systemization of your manufacturing process to allow customer specific requirements to be entered into the system and a manufacturable product configuration being returned. Mass customization aims to provide goods and services that meet individual customers' requirements with near mass production efficiency.

The mass customization value proposition comes from the dual opportunities of increased market share and higher profit margins. It starts with understanding the Customer Sacrifice Gap, Good Variety vs. Bad Variety and the Four (4) Faces of Mass Customization.

Customer Sacrifice Gap – the gap between the product the customer wants and what is available in the market

Good Variety vs. Bad Variety – good variety is product/service variety that customers are willing to pay additional for. Bad variety is variety that customers are not willing to pay for.

Four (4) Faces of Mass Customization
• Transparent – providing customers with customized products whose customization is
transparent or unknown by the end user
• Collaborative – customers collaborate with customizer on the design and delivery of the product to specifically meet the customer’s needs
• Adaptive – providing a standardized product that is able to be customized in the
hands of the end user
• Cosmetic – providing a standardized product that is marketed to different
customer groups in unique ways

How to Mass Customize?
These benefits are not obtained by incremental changes to a mass production system, but by a fundamental switch in production paradigms. Our advice for making the change is:
1) Start small. As systems and techniques are proven, scale them up.
2) Start at the front end of the production processes first, use shallow customization there, and as the mass customization systems are proven, backwards integrate into the parts of the mass production systems which will provide the greatest consumer value by being made flexible.
3) Use software systems designed to support this new paradigm, don't expect that mass production software can be made to fit this new paradigm with only minor modifications.
4) Make the above stated benefits of mass customization the goals of the mass customization project. As the mass customization project is being planned and deployed, check the project against these goals.
5) Let us know if there is any way we can help.

Thanks,
Ben Moore
Agent Technologies, Inc.

FREE Download of Chapter on Product Configuration from our Book: The Consumer's Workshop: The Future of American Manufacturing (Download)

The Comeback of American Manufacturing?

2009-09-15T17:58:00.000-07:00

In the August 2009 report by the Institute for Supply Management (ISM), ISM shows American Manufacturing is finally growing! The ISM’s Purchasing Manager’s Index (PMI) was 52.9. A PMI reading over 50 indicates manufacturing is growing…while a reading below 50 indicates that manufacturing is contracting.

For eight (8) straight months the PMI index has increased, however, August was the only month that the PMI finally crossed 50…showing American Manufacturing is growing.

In August, 11 of the 18 manufacturing industries—Textile Mills; Apparel, Leather and Allied Products; Paper Products; Miscellaneous Manufacturing; Printing and Related Support Activities; Computer and Electronic Products; Transportation Equipment; Nonmetallic Mineral Products; Electrical Equipment, Appliances and Components; Fabricated Metal Products; and Chemical Products—reported growth. ISM also expects manufacturing to continue to grow through the end of 2009. Yeah, American Manufacturing is on the Comeback !!!

One of the key drivers to the increase in the PMI is New Orders in Manufacturing due to manufacturing inventories being down 11 consecutive months.

But before we get too excited, in August, Manufacturing lost another 63,000 jobs. The pace of job loss has slowed but more job losses in this sector still hurts. As a matter of fact, in 15 counties in Ohio, Kentucky & Indiana Manufacturing lost 17,500 jobs from July 2008 – July 2009. This was about 2.5 TIMES more jobs lost than any other sector. (Ohio Department of Job and Family Services)

Although there are still job losses, this growth in American Manufacturing is real…or is it?

Let me know what you think…Do you believe American Manufacturing is on the Comeback ?

Marketing Doesn't Work?

2009-08-10T07:36:00.000-07:00

I continually run into companies that believe that marketing doesn’t work and stress all they need are a few “GOOD” sales people. These companies are looking for a magic bullet to “FIX” their companies. Just hiring sales people to “CALL PEOPLE” may generate some leads that eventually may turn into sales, however, good marketing will generate MANY MORE QUALIFIED LEADS that will convert faster and more often than a sales person alone because marketing and sales go hand in hand. Marketing is about messaging, creating awareness and creating leads for a handoff to sales. When marketing campaigns are done properly in this context, marketing works well.

The marketing funnel below shows the marketing and sales pipeline funnel where leads from marketing campaigns enter into the pipeline, interest of these leads are gauged, a preliminary evaluation for a sales handoff is performed and then sales can work to turn the qualified lead into a customer. This process may take minutes or it may take months to take a lead from Awareness to a Repeat Customer.

Marketing campaigns be it email, eNewsletters, Websites, Video, Direct Mail, Online Campaigns, Social Media, Webinars, etc. can generate many leads for a handoff to sales and will be a repeatable system for leads and future sales …leading to record revenues for your business. The key to making this happen for your business is deciding on the metrics for marketing campaigns and tracking the leads in your marketing and sales pipeline. Companies with some type of customer relationship management/sales contact management system (system to track activities related to sales leads/prospects) have 43% more sales per employee than companies without one.

So if you want more sales to your company now and in the future:

SETUP A SYSTEM FOR SALES & MARKETING IN YOUR BUSINESS
START PLANNING & IMPLEMENTING A FEW MARKETING CAMPAIGNS
START USING A CUSTOMER RELATIONSHIP MANAGEMENT (CRM) SYSTEM

Shameless plug coming. Our system XRP is an online CRM/ERP Solution specifically designed for small to mid sized business for just $9/user/month with no upfront investment. Click here to sign up for a FREE Trial.

Ben Moore
Agent Technologies, Inc.

GM Out of Bankruptcy - Now What?

2009-07-14T09:54:00.000-07:00

On Friday July 10, 2009 a new company GMGMQ.PK arose from the GM bankruptcy proceedings just 40 days after the bankruptcy filing with:

- U.S. Treasury owning 60.8%
- The Canadian and Ontario governments owning 11.7%
- The Union Retirees Healthcare Trust (VEBA) owning 17.5%
- Current Debt Holders could get as much as 10%

This new company may be ready to have an Initial Public Offering (IPO) sometime in 2010 and may raise some capital to pay back some of the money borrowed from the U.S. Treasury. Below is the comparison from the OLD GM to the NEW GM.

OLD GM

Debt: 172.81 billion
Brands: Chevrolet, Cadillac, Buick, GMC, Pontiac, Saab, Saturn and Hummer
Employees: 91,000 (end of 2008)
Dealerships: 6,000 (end of 2008)
US Factories: 47

NEW GM

Debts: 11 billion (Another 9 billion in preferred shares)
Brands: Chevrolet, Cadillac, Buick and GMC
Employees: 64,000
Dealerships: 3,600 (end of 2010)
US Factories: 34 (end of 2010)

The new auto industry is expected to move 9.5 million vehicles per year down from the 16 million units of years past. This new trimmed down GM supposedly can be profitable in an auto industry of 10 million units per year or more. As a matter of fact, since 2005 GM lost more than $80 billion in the US. Why?

Bad Management? Yes, management does play a role in the crisis at GM and how Ford has avoided this same fate. However, GM was making vehicles (SUVs, etc) that at one point the American public wanted and were profitable for GM. Then the American public changed and what was delivering a good portion of GM’s profit, dried up quickly.

Unions? It’s been all over the news how much more United Auto Workers (UAW) union workers get than their non-union counterparts in foreign owned car manufacturers. Yes, these higher wages and benefits and other legacy costs contributed to GM’s situation.

Credit Crisis? Companies have shed millions of jobs since December 2007 when the recession officially started. People without jobs and people worried about losing their jobs don’t buy new cars. Also, with the credit crisis, many people were unable to get loans for new cars.

Lack of Economic Nationalism? Let us all look in our garages and see what vehicles we own. My parents never have and most likely never will buy a car from a foreign car maker. I, on the other hand, have never owned a car from an American car maker…even my motorcycle is foreign. After seeing what has happened to the American Car Manufacturers, I think I need to buy American for the next vehicles for my family. Some of you may want to consider the same.

All of these things contributed to GM’s demise, now let’s see what the new, leaner GM does. All of American Manufacturing and all of America is watching and hoping for GM’s success.

Ben Moore

Agent Technologies, Inc.

What Now for Automotive Suppliers?

2009-06-10T01:00:00.000-07:00

Chrysler, the #3 American car manufacturer filed for bankruptcy protection with 39 billion more in debts than assets. General Motors (GM), the #1 American car manufacturer filed for bankruptcy protection with 91 billion more in debts than assets. Since February 2000, employment in motor vehicles and parts has declined by approximately 50 percent. (Source: Bureau of Labor Statistics) So what is to become of the automotive suppliers?

Maybe we can all learn from the state of Michigan. Michigan is helping automotive suppliers transition to biomedical device production. The biomedial sector is GROWING at around 5.7% per year and the U.S. is a leader in biomedical exports in the world. (Would you want something installed in YOUR body made in a foreign country?) Automotive suppliers have many of the same skills, capabilities and systems in place to produce biomedical devices… it is a matter of retraining workforce, tracking all raw material lots into a batch of products and understanding ISO 13485. Michigan has provided training for some automotive suppliers to transition to biomedical devices and Michigan is launching a fund to help manufacturers diversify into new emerging sectors such as medical devices. The Michigan Economic Development Corporation (MEDC) recently unveiled the Michigan Supplier Diversification Fund. Its first program, the Michigan Loan Participation Program, will address the current lack of bank financing available to companies that are attempting to diversify. Under the loan program, the MEDC will partner with private lenders to offer loan participations with little or no interest payments for a specific period of time.
I recently attended an event in Ohio about Transitioning Ohio Manufacturers to Medical Device Production and had a few takeaways:

1) Biomedical has three categories from simple tongue suppressors to heart valves and there are regulations associated with each category
2) It may take 3-7 years to get a product to market
3) If a manufacturer wants to get involved in biomedical it begins with early relationships with biomedical companies while they are developing the prototype with the upside that the manufacturing contract may last 10 years or more
4) Ohio has established incubators for biomedical devices - one across from the Cleveland Clinic and BioStart in Cincinnati
5) ISO 13485 covers medical device production
6) Medical devices go through a decontamination phase via gamma radiation or electronic beam. For example, regular plastic or metal devices can go through a decontamination process and then be sold as a higher margin biomedical device.
7) GMPFirst.com - for Good Manufacturing Practices (GMP) for Medical Devices
8) DeviceLink.com - to learn about the Medical Device Industry

Happy Diversification,
Ben Moore
Agent Technologies, Inc. and Niche Consumer Products, LLC

Microsoft Excel is NOT the Answer

2009-05-13T09:00:00.000-07:00

Almost everyone has Microsoft Excel on their computers and many use it for situations that Excel was never intended to be used for. But what happens so often is that people have a hammer like Microsoft Excel and each business need begins looking like a nail.

Microsoft Excel is a spreadsheet application that works well for managing some forms of numerical data and managing some simple lists. Now people have even created macros to manipulate the data within its cells and continue down the path of more and more advanced macros instead of asking the question…”Should we try to do this in Microsoft Excel?”

Many times the answer is NOOOOOOOOOO. However, companies don’t want to spend money to have a custom application developed, although they are not taking into account how much this Microsoft Excel application is costing their organization.

Many companies need to manage revisions of their data. This becomes a problem with Microsoft Excel because Excel was not built with very much revision control, hence, people rename the file to latest revision and communicate with those involved what is the latest revision. This DOES NOT WORK. You can never be certain you have the latest revision. How much would it cost your organization to use an outdated revision?

Many companies need to store data over time. This is a good use for a database and Excel is not a real database. However, not everyone has a database on their desktop and even fewer know how to use that database. Hence, these people TRY to use Excel, maybe begin adding macros for these situations and introduce risk into your organization and a potential drop in productivity for the wasted time spent trying to manage these worksheets and applications.

Many companies need to store product and Bill of Material (BOM) data. Many times this is complex data that is linked to other information, this information is known to change over time and the product information or BOM is critical to manufacturing. Using Excel introduces tremendous risk to your organization because many links get broken within Excel causing formulae not to work, you may not be certain you are working off the latest revision and errors can get introduced due by people that have access to these files. How much would it cost your organization if you made a product lot off of a bad BOM…$10,000, $50,000, $100,000 or more?

Don’t get me wrong, Microsoft Excel is a powerful software tool and can be the answer for numerical data manipulation, but Microsoft Excel is NOT the Answer for many other situations that it is being used for.

Contact us, if you have a Microsoft Excel application that is:
1) not fully meeting your needs
2) difficult to manage
3) able to be changed by the wrong people

We turn these Microsoft Excel files into secure applications that fully meet your needs and are easy to manage.

Thanks,
Ben Moore
Agent Technologies, Inc.

Last Minute Tax Tips for Manufacturers (Businesses)

2009-04-15T09:00:00.000-07:00

If you are looking for Last Minute Tax Tips on April 15th, then it most likely is too late. Your business taxes most likely have already been completed or you’ve filed for an extension. I even doubt if your accountant or financial planner is answering the phone today as they finish the work they already have. Although I am NOT an accountant and I DON’T play one on TV, here are some tax tips.

Retirement Account – You have until April 15th to make a contribution to your IRA or SEP-IRA from your profits and not pay income taxes on this contribution until you withdraw money from your IRA or SEP-IRA.

Inventory – If you have some inventory that you can’t sale or that is damaged, make sure you write this off for 2008. Do a thorough review of your inventory to make sure you maximize this deduction.

Expenses – make sure any expenses you charged in December 2008 on your Visa, Mastercard, etc. are added to your business expenses for 2008 if you use the cash accounting method.

Expenses – How many expenses have you labeled as Entertainment for 2008. Entertainment is only 50% deductible while advertising and some other expenses are 100% deductible. The point is only categorize an expense as Entertainment, if and only if it is Entertainment.

Expenses – I am a big believer is continuous education. What you learned yesterday may not help you win tomorrow. If you enroll in classes that assist you in operating your business, you may be able to deduct tuition, fees, books and even travel. Talk to your accountant. (Maybe not today…but when they start answering the phone in a few weeks.)

Expenses – As my kids have gotten older and have started looking at me as an ATM machine they want to withdraw money from constantly, I have hired them in one of my companies. You can pay children under 18 as much as $5,700 per year; this amount is 100% deductible and they will owe no federal or social security tax on the money.

Manufacturing Deduction – ask your accountant if you quality for the 6% manufacturer’s deduction. Some software companies, engineering, construction and manufacturers are elgible for this 6% deduction.

As I mentioned, since I am not an accountant and I did not stay at a Holiday Inn Express last night, talk to your accountant/financial planner to see if any of these ideas will work for you.

Ben Moore
Agent Technologies, Inc.

Choosing NOT to Participate in the Recession

2009-03-11T11:00:00.000-07:00

Choosing NOT to participate in the Recession is easy to say…but can it be done? My answer is YES, because it is all about your attitude. It may be storming outside of our organizations, but we control the environment inside our organizations. We can provide the positive CAN DO attitude that will spread in our offices or we can provide the negative CAN’T DO attitude that will infect our organization. We as the owners have to choose.

Here are some of the phrases we can not allow in our businesses:

1) NO ONE IS BUYING – No, business is still being done, we have to find it. Now it may be harder to find, but that does not mean it is not out there.

2) EVERY COMPANY IS LETTING EMPLOYESS GO – No, some companies are still hiring. Although the unemployment rate is the highest it has been in 25 years, it could be the time to hire some commission only sales reps.

3) NO COMPANY IS GROWING – No, some companies are still growing. They may or may not be your existing clients, but it could be you.

Kiplinger’s Economic Outlook for 2009 expects the economy to shrink the first two (2) quarters of 2009

We business owner have a choice to be VICTIMS of what is going on around us or we can be VICTORS. If our company is to grow this year in a challenging environment, it is up to us. We need to look at what goes into creating profits from converting leads to the increasing margins.

# Leads X Conversion Rate = # Customers

# Customers X # of Transactions X Average Sale = Total Sales

Total Sales X Margins = PROFITS

If we want to increase profits this year, we need to look at the NUMBERS for each step and put plans in place to improve in some or all areas.

What are we doing to Increase the Number of Leads?
What are we doing to Increase the Number of Transactions or Size of the Average Sale?
What are we doing to Increase Margins?
What are we doing to Stop Customers From Leaving?

By answering these questions will allow us to NOT Participate in the Recession and continue to grow your business even in this economic downturn.

For more information on NOT Participating in the Recession, register for our Webinar: Increase Sales – Improve Operations…even in an Economic Downturn on March 12, 2009 from 1:00 – 2:00 pm EST.

Alternative Financing

2009-02-11T01:00:00.000-08:00

We are in tough economic times and it will get tougher. With interest rates so low, the cost of loaning money is more risk than some banks want to take and many are turning down loans and lines of credit or they may only provide loans that have a monthly variable interest rate. The news may sound bleak but there are alternative funding sources to buy equipment, improve technology, or train your employees?

Federal and State grants and tax incentives are available for most companies. The programs vary from state to state but if you have locations in multiple states, each location can be eligible for grants, tax incentives, or both.

Grants are designed to help stimulate economic development through customized business and industry specific skills training programs and job or training analysis. In most states, the company may be eligible for reimbursements of up to $25,000 for small businesses and up to $50,000 for larger businesses.
Tax incentives are available for companies that are adding employees, building or adding on to an existing structure or have projects that require new equipment investment. Tax incentives range from $25,000 to millions and can be used immediately or spread out over a period of years.

At a time when many companies are looking to protect their bank lines, they’re finding substantial value in the sale leaseback. The sale leaseback is a transaction wherein the owner of an asset sells the equipment to the leasing company and then they lease the equipment back for a determined term. This provides the benefit of a cash injection into the company from the sale, while continuing to have the use of the asset. The ability to free up the original owners capital can be a practical means of assisting a company with cash flow.

A common practice with businesses in tough times is to hold payables longer. Instead of paying in 30 days, it is now 45 or 60 days. Factoring receivables might be a good short term option. The Factoring Company buys your receivables and gives you 80% of their value. As the receivables come in, you receive the remaining amount minus their fee. This fee can range from 2%-12% depending on the age of the receivable. Use caution though. If you have receivables that are risky or age past 90 days your profit may be eaten up with the fees charged by the Factoring Company.

Acquiring capital for your business from an investor or partner is not new but if you have not pursued this in the past, you may want to now! Investors look at many opportunities and your company will need to stand out to get their attention. Investors will want to know, what has been your success so far, how much do you need, how will the money be used, what will be done to grow the company, and how will the money be paid back. There are a lot of private investors who have an interest in investing in growing companies specifically those in manufacturing or distribution. You do not have to go to the large investment groups to find them.

Article provided by Sheryl Shultz, President, Productivity Masters (513) 564-1596. For more information about any of these options, please call.

Yearly Business Planning like Procter and Gamble (PG)

2009-01-14T13:00:00.000-08:00

Before we get started with outlining the Procter & Gamble (P&G) yearly business planning process, I want to mention...although you may learn how to business plan like Procter & Gamble, it is doubtful you'll have the success of Procter & Gamble (sorry)....but you should drastically improve your business performance.

The first part of the P&G yearly business planning process is defining your business Objectives - Goals - Strategies and Measures (OGSM).

Objectives - Define the broad Objectives for the business within the next fiscal year
Goals - Define Numerical Goals for each objective within the next fiscal year For example, +1.0MM in Net Outside Sales (NOS)
Strategies - Define Strategies to reach each Goal to be executed within the next fiscal year
Measures - Define Numerical Measures for each Strategy within defined timeframes that are in line to deliver the Numerical Goals For example, X number of sales from a strategy.

Now after you have laid out the OGSM (Objective - Goals - Strategies and Measures), now it is time to make it real for your organization.

Assumptions - List out all assumptions influencing the OGSM including economic environment constraints that could significantly impact results
Tactics - List out tactics for each strategy that you can implement within the next fiscal year that are in line with the numerical Measures
Targets - Set targets for the strategies and tactics to make the plan actionable. A plan that is not actionable is USELESS!!! Some targets might be something that is measurable each week, month or quarter so you have an on-going way to measure your progress toward the larger goals.

Now that you have an actionable plan that you should keep in front of you each day. Periodically, you have to REVIEW the plan:

Results - Periodically have an Action Plan & Review Form to summarize results versus your targets. Simply put, did you do what you said you were going to do? List out these numerical results because what you measure you can control.
Gap Analysis - Analyze why you were able to surpass some targets, barely meet some targets and not meet other targets.
Plan Adjustments - From your Gap Analysis, what are the plan adjustments that you will make to get on track to meet the larger goals between now and the next plan review.

With these steps you will be able to Yearly Business Plan like Procter & Gamble, but the key is making sure your plan is something that you USE every day, that is ACTIONABLE and is PERIODICALLY REVIEWED and ADJUSTED.

Happy 2009 Planning,
Ben Moore
Agent Technologies, Inc.